tv Squawk on the Street CNBC September 26, 2013 9:00am-12:01pm EDT
phone for quality, reliability, but now the exterior is more exciting. this is a result you see of toyota taking the helm. >> and he's giving you a paddle shifting lesson after. >> all right, all right. >> make sure you join us tomorrow. right now it's time for "squawk on the street." >> good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber. watching for reaction to revised q2 gdp. jobless claims a little bit
better. some red arrows in europe as india's parliament continues to fight about berlusconi. our road ma'am begins with the s&p, looking to claw back some ground after yesterday's closing at the low, below 1,700, the longest streak of the year. >> jcpenney had been pointing down sharply again on continuing concerns on whether they need to raise capital and just how much. but the stock looking up after the company comes out with a release saying, hey, we're still seeing progress here on our turn around. we'll have the entire story in a moment. >> $11 billion is what jpmorgan could end up paying to tie up security probes. >> and jcpenney did fall below $9, getting close to an historic
intra day low. the company has a statement out saying they're pleased with their progress thus far in their turnaround, starting to see greater predictability in its performance across many areas, improved by its purchase conversion, which has been a long-time sticking point and anticipates will experience positive comps coming out of the third quarter and throughout the fourth quarter of 2013. what a week it has been for jcp. >> positive comps coming out of the third quarter, not into the third quarter. >> that's their words. >> maybe it's year over year, do you have some easier comps. >> you're comping off the johnson lows. >> right. so that may be a little more -- i continue to think this situation could stabilize if they can raise the cash. when i say "the situation," i mean they stay in business. i think one of the things that really hurt them is just they are an apparel company with the
wrong and expensive home goods. hope goods is what's selling, apparel is not. >> they're not being hurt by that trend that all retailers are seeing. >> jcpenney when you shop there, it's not that much different from shopping in the apparel aisle of walmart, it not that much different from shopping from macy's. so if macy's is doing poorly and the apparel part of walmart not doing that well and target apparel not doing that well. >> it is the most shorted name in the s&p. there is this paradox of trying to raise equity, as reports have suggested. does that encourage you going into the holiday with a buffer or make you worry about the fact that they need it at this point? >> well, i didn't think they did need it because they did raise very successfully a lot of money at goldman, you broke that story. there's two jcpenneys here.
there's the store and there's the share base. i don't think the share base is saying, you know what, i like asina better than jcpenney's, better than kohl's. >> we had hedge funds who own a position amongst the likes of glen view or perry or soros. but when you talk to people in retail, as we both do, who have been doing it for a long time and talk to them over time, they have pointed out again and again how difficult it is to turn around a company like this. first you are get in there and you're mike ullman, the damage done by mr. johnson is truly perhaps irreparable. some saying it was a mortal wound. and the turn around can take years when you talk again to
experts. that's what led me a month or two ago to say, hey, those guys don't know any more out there than the hedge funds. i do wonder about some of the things jcpenney has decided to do. mike ullman was in town yesterday, meeting with analysts yesterday. he didn't say anything material conceivably but people took different takeaways from their meeting with ullman. now they come out with the statement. and my final point here as well is they let ackman out, they let vornado out. maybe they could have kept those guys in and sold shares primarily and then let them out. >> that would have been more fair. you want to see what the mix is here. look at bed, bath and beyond. they don't take questions.
they sell everything that is selling in this country, it's all hard goods, all the products that go into kitchen and bath. jcpenney did not have the right kitchen and bath because johnson bought the most expensive stuff, which the people at jcpenney, they take the coupon at bed bath. bed bath does great couponing, i love bed bath and i say, wow, jcpenney had exact wrong mix. manny is a fantastic apparel guy and they're having a tough time. penny has the wrong stuff in every aisle. >> the housing tailwind, which penney essentially turned around and ran right into. >> look, bed bath is a very good company. the analysts have been very wrong on it. >> the cash flow -- >> 25% of the stock in three
years. one of great buybacks. >> you may well be right on that. >> there's 30% store growth. they got a lot of room. they typically don't give you that, don't show that much leg. but it's palpable. this is the part of walmart that's doing well, jcpenney does not have it. >> what do do you here? >> it's a confidence game as well you got to remember with jcpenney. it's not a bank, jim, but it has suppliers, they have to -- you have to continue to have confidence amongst the ecosystem in which you operate if you're jcp. when you see a stock break below $10 into single digits. >> how are they going to get the ceo? >> who is going to take that job? >> i don't know. retail is a very -- it's a very hard business. and no one wants to go in and damage their reputation by not being able to save jcpenney. >> judging from the characteristics they're looking for in a successor. citi lowers their target from 7
to 11 today? do you wait to a secondary to prays? >> this statement that came out this morning says we're in good shape. either way it still seems to say they need to raise capital. they have to do equity because isn't it already the means against the inventory? >> i know. by the way, most of the stocks held by these four hedge funds at this point, it's fascinating. >> there's a winner, though, and it's my charitable trust. tjx. tjx has home goods, which is doing incredibly well. tjx has cash, real cash in the barrel head. when you can't sell your inventory, you dump it at tjx.
they don't mind having summer goods, winter goods. they got the goods. >> the s&p does look to shake off a five-session losing streak for the first time since december. futures are on the rise. jobless claims falling to a new six-year low. second quarter gdp remaining steady at two and a half. lawmakers working on bills to raise the nation's debt limit, as well stopgap spending legislation that would avert a shutdown by midnight on monday. s&p has only had six -- i'm sorry, seven six-day streaks down since 2008. so this doesn't happen very often here, jim. some argue we're a little buiit oversold. >> interest rates spike a little bit this morning off the jobless claims. when you see "usa today" shut down wood chip economy, they give you the numbers, it does take your breath away. it does say that everything you think is going to happen in the
fourth quarter isn't going to happen. >> zandy says it's going to shave about 20 basis points. even if it's a couple of days. if it goes for a few weeks, you're talking a point and a half off gdp. >> look at hertz. they report a number that's k i quite disappointing and they say it's airport rentals. dea delta, some of the airports say it hurt their number. if you go back to the template, it was travel that got hurt. >> in terms of a got shutdown? >> yes. because it's not essential that people travel in government. >> that's what -- now the airlines doing well. gasoline's coming down. jet fuel coming down. but that's where if you just go back to 1995, did a lot of work on '95 and '96 and that was the
area that really got hurt. >> what does it say that small caps continue to knock the cover off, the russell again a high again yesterday. >> they're almost entirely biotech. that's what it is. and biotech has a double advantage. one is that it's not economically sensitive. the second is take a look at what eli lilly said today. they're having poor results with one of their breast cancer treatments. who has good results? you're talking about a celldex. it's just incredible. you see these companies that are doing targeted work against cancer. they are the dominant companies in terps of who is responsible for this rally. dominant. and they keep coming public -- >> you got a company come public yesterday that's part of that on the diagnostic side. >> yes. you look at celgene. one of the three-legged stools is breast cancer.
they've given away a loft of th up side for breast cancer drugs. it is biotech leading this. my friends who are in biotech are saying listen, be careful, some of these companies are public now, they are basically research labs. they won't deliver anything for five, seven years and they're not going to have enough money. then again, if you think the economy is slowing, who has the greatest growth year over year? a company who discovers a new drug. very exciting group. >> facebook does look to be trading above 50 in the premarket, jim. it is a long way from 17. it's a long way from that quarter in july where the stock just rocketed. i remember sit hearing asking you is it going to get back to 38? you said it would be a straight shot. i don't know if even you thought it would go to 50. >> i like video. i do some work at the
street.com. i founded that. i knew where facebook was going, that's the hot area. >> this morning there's a lot of people who say another guy raises numbers. well, jefferies, if you go back, jefferies has the best piece today. jefferies upgraded stock in may. this is the most credible analyst on the street in jefferies. i got to tell you, brian pitz, i don't know him but when you hear a lot of the upgrades, it tends to the analysts who got it wrong. this guy got it right so i think it's a little more meaningful than most of the others. >> you said you took a little off the table? >> facebook can't be your biggest position. had that trouble with apple. apple became the biggest position. >> then they become the biggest position --
>> and then i fire him and that's okay. i always wore a yellow post-it on my head if i got it wrong. i made people walk around the block twice, get me a soft pretzel and a diet coke. but i wore the post-it myself because i am a forgiving man. >> you must be a joy to work for. >> people always loved it. bargain with the devil. >> good for computer monitor sales. >> i said, boy, my stocks are really holding up. my stocks are holding up. my pc had frozen. you can throw a pc at those windows. they fixed that. i said work for me, you get compensated incredibly well and you will get hit by a water bottle if you got it wrong and i have keyboards to throw at you. >> who trained me?
>> that's the point. >> when we come back, when carl icahn and tim cook are scheduled to get together over a meal. >> and coming up, david marcus, president of paypal. and we see if the decent numbers hold when "squawk on the street" comes back. [ man ] monica had big dreams for her wedding. i want peacocks. peacocks? walking the grounds. in tuscany. [ man ] her parents didn't expect her dreams to be so ambitious. italy? oh, that's not good. [ man ] by exploring their options, they learned that instead of going to italy, they could use a home equity loan to renovate their yard and have a beautiful wedding right here while possibly increasing the value of their home. you and roger could get married in our backyard. it's robert, dad. [ female announcer ] come in to find the right credit options for your needs. because when people talk, great things happen. you really love, what would you do?" ♪
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remember that tweet heard around the world from carl icahn when he realized by typing less than 140 characters, he could make a stock go up enormously? that was back on the 22nd or so of august i believe it was. we heard from him saying i spoke to tim, he believes in a buyback. they're doing one now. we're going to talk about the magnitude. that planned meal, which may no longer be a meal, is going to take place on monday. >> what? >> on monday -- today's what, thursday? on monday of next week on the 30th, right at the end of the month of september tim cook, the
ceoapple, and carl icahn, one of the top stockholders, but a lot of stock but not a top-ten holder, they will be having a meeting. originally perhaps a dinner but mr. icahn tends to like to dine on the later side. carl tends to be a late-night guy, likes to have a couple of martinis with dinner. mr. cook i'm told is more than an early good evening guy. >> so what do you end up at midnight? >> no, you end up with a late-day meeting, lunch, brunch, late day. >> so bloody marys? >> i don't know. i don't know what the alcohol would be. >> a lot of times when he does get up early, he watches this
show. >> does he get up early enough to watch this show? >> carl, if you're out there, we're kidding to a certain extent. but of course this is taken very seriously by apple and shareholders. while mr. icahn is not a top-ten holder, he has a great deal of influen influence, he is a large shareholder, has quite a bit of stock. the question is whether they're going to increase the buyback. will they feel a need to perhaps respond to him or is it enough to say, hey, we had a very good week, by the way, carl, with our new phone, did you notice, and we have the largest buyback in place anyway so what do you want with us? >> the morgan stanley note today talks about, givagain, this is new thesis, trouble keeping them in stock. this is the dan hesse sprint notion he put in my head.
another great article in the "new york times." the apps that you're using. how much do you love the photo app that it tells you right where you are? >> the aviary app is one of the best named for 2007. >> i went to the vineyards last weekend, it had exactly -- >> telling you where you took your pictures. >> take a look at your photo albums. >> i did. and it knew i was at the botanical garden. how do they know where i am? >> nsa. >> these are old pictures. >> you discover a lot of enough things on this phone. whether it's going to be chinese takeout or the martinis or an all-night egg mcmuffin. i know that's driving the stock. but i also think the fundamentals are playing quite a role here. >> we'll see. perhaps we'll get some tweets
from mr. icahn. >> cramer's "mad dash" is next. s&p trying to rebound from five declines in a row. "squawk on the street" is back straight ahead. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason
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♪ need some money, talking about money ♪ all right. we got time for the "mad dash." i saw greg mafai yesterday, liberty, liberty controls sirius satellite. >> piper came out and talked about sirius 2.0. this note says they've got hispanic programming is going to take off and used cars sales. this is one of the great retail comebacks, malone. this is going to 5 and this is a stock -- >> really? going to 5? >> i think the fundamentals are rapidly improving. it is an overvalued stock on the basis cable. but in terms of the netflix factor, the tesla factor, this
is also a well-loved product where people then go buy the stock. i'm saying they may none be so wrong. >> they believe they can do better in the used car market where people turn it off? >> do you even look at your bill? don't you pay it automatically? >> i don't actually subscribe to sirius. >> huow do you listen to cnbc - can i suggest you get the football package? >> i've been here 20 years. it's implanted in my head. >> i want that root canal. anyway, i think this is going higher and i think people are being rewarded by an excellent management team offering a plethora of programming. and the hispanic entrance, i don't know, sounds like a bright move. >> he indicated we like the business, we want to stay with it.
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. all right, you're watching cnbc "squawk on the street," live from the financial capital of the world. the opening bell here in just a few seconds. at the big board, the president of the slovak republic, in new york for the 68th u.n. assembly. and the made for africa foundation and african bank, investing in infrastructure on the continent. >> companies moving very big. >> ge among them. >> american tower, they are uganda's tower provider. a lot of money going to africa, a lot of it to prevent the china, block the chinese who are really putting money in africa. it's a big continent. >> that's one of the reasons that lucent is able to keep its at&t and verizon business.
>> we keep it out because of national security concerns, which seem to be fairly well founded when it comes to cyber espionage and what not. >> there was a special on it. >> there was, some time ago. then it got a lot of attention a long time ago. >> the chinese very powerful, very powerful. >> one place where people are not putting as much money apparently, the airport car rent al. hertz down by 11. it's their biggest business. after posting double-digit revenue growth in july, they took their numbers down from 178 to 188, down 10 cents. >> even though there's been tremendous consolidation in that business, it's surprising if you do rent a car, the car seems like it's $79 a day. by the time you check off the boxes, it's 240. car and gps. >> keeping your eye on facebook. it's going to open here above
250. jim writes on twitter -- i don't know who this is but he says unlike anything i've seen in my 30 years in business from hated to adored the shift in sentiment on this man. have you ever seen anything like this? >> no, i've never seen anything like this. a big cap stock like that, a $100 million stock, this is a changed company. they had no mobile solution. suddenly they had the best mobile solution. so you went from a company that was way off the mark to being a company that is literally your favorite advertising vehicle for $1.1 billion. have you been following any of these, like the twitter deals, the nfl twitter deals, run instant replay. these companies, dunkin donuts on tonight. i mean, facebook, facebook, twitter, social media is how people are -- >> jamie dimon of jpmorgan chase will be at the department of justice today to meet with
attorney general eric holder. of course comes after these reports all over the place, citing an $11 billion number. part of it to go to consumers, part of it in other types of fines. >> i think they have to avoid a bp situation where holder made a deal for bp and it was worthless in the end because it left open a lot of other issues. >> civil litigation, right? >> you didn't get to cover. they need a global deal -- this stock goes to 55. if they get a deal which says they are held harmless for everything after a certain date, that's what they need to do. they need to make it like a tobacco litigation deal where there are no more lawsuits at any level, once they made the grand bargain. >> this is related to mortgage securities again. we've seen this with bank of america to the largest extent via countrywide, their own operations. and enormous penalties. not just phan ooe and freddie getting money back. so this is not -- but they have
so many other things they've been dealing with. the numbers start to -- >> but there's -- >> this is huge, this news. this is not the law firms meeting with the justice department. very rarely do you get the actual client talking with the justice department. he wants a deal. this is significant. >> he wants to just move on and get this company out of the spotlight once and for all, settle it all. i know the board would like the same, not have the government after you all the time. >> if you can get a deal where you can have normalized earnings for jpmorgan, i can take that number up to $7, if the 10-year goes to 3.5, i can take it up to $8 if i'm ready to get rid of many of my legal fees, that is a huge swing in earnings per share. maybe they could have their dividend boosted on their own. now you're getting a stock with a buyback, a big dividend with the earnings power of $7, $8. >> reserve reversals would stop.
that's helped them a lot fund the litigation. >> the government has got to shame the company because they don't want to see the stock going higher. the government doesn't want to say, wow, we just gave jpmorgan even more money. holder is walking a tightrope. the head of the justice department is walking a tightrope, the attorney general of the united states. he has to make a deal that does not make it look like he was too sweet. at the same time he can't take jpmorgan and say, listen, you don't have any money left to loan because you have to give it all to the people. >> you talked about them going to 55 if held harmless. that doesn't discount remaining agencies -- >> they need to have this low ball. fannie can't come after him, fha can't come after them. say, listen, this covers everything -- >> you're talking multi-agency. >> yes. if anybody sues us, we got a
judge and the judge will say, hey, government, you signed a piece of paper, you can't sue jpmorgan. that's how you cut that legal bill by two-thirds. >> when it comes to wamu, they had a paper that said they wouldn't sue them. the american people did not benefit. >> the stock is up this morning. shares of yahoo! what a week. back to the hedge fund we were talking about. there's another one your trader might said sell it. two weeks on yahoo!. >> bulls, bears and pigs, david. >> what a shot. wow! >> one of the greatest stocks. a chinese roll-out this morning. we saw research, chinese internet market very, very hot. google is not allowed to be there. >> alibaba and you've got a couple of giants there. of course they own 24% of alibaba. yesterday i brought up the idea that perhaps some of their stake
could be distributed to shareholders in tax efficient manner, that being yahoo! and you shouldn't tax affect the entire stake in alibaba. >> they have american-like financials. yes, yahoo! goes higher because people are saying they're going to figure out a way to montage this without a big tax hike. >> it is alibaba, not ne necessarily the core business people are feeling better about? >> this marissa meyer has figured out the way to unlock the values and the last ceos didn't. >> part of that is having some board stability, which is not of her making necessarily. >> huewlett packard does not hae that. >> bed bath is also harmon,
okay, by baby. and bed bath when you go, there the big rap against them is they're going to be destroyed by amazon. the company is very tight lipped. they never addressed the amazon issue but amazon did not destroy bed bath and many of the analysts were shameless about this, in terms of downgrading this in the 60s. i saw this happen. my charitable trust owned the stock, said i can't take the downgrades. i would be wearing the bby post-it from here all the way to mid town. >> but then you're taking it off after 51st street, right? >> let's get to bob pisani. >> a nice little move to the up side. 2-1 advancing stocks. but there's still a lot of worry on the street. guy who is like to worry and i like talking to those guys because they keep you sharp, are worried about complacency levels you see. art cashin has a great phrase to
describe what's going on right now, why the markets keep going up, the rationality put. the world did not blow up, china did not blow up. syria so far has been imaginable, syria didn't blow up. summers didn't blow up. everything has been man aageabl and this is now being applied to the debt ceiling and continuing resolution, which could get ugly very fast. the keystone pipeline is being thrown into this and discussed as part of the conditions for a debt ceiling raise. it could get ugly fast. here's what i'm worried about and what a lot of people are starting to get worried about. complacency is very high. the vix is very low right now. you look at put prices to go out and buy an s&p. prices are low. can you buy protection cheap right now. almost as cheap as the 2008
blowup sh since just before that. i think that's a cause for a little bit of concern because while things have gone well this year no, big blowups, we can't guarantee it's not going to happen in this particular case. >> let me talk about the ipo. did you see on the nasdaq, has not opened yet, they set up cloud computing for clients. so this magic phrase, software computing continue as to do well. >> i don't know what's going on at hertz. i was shocked to hear this. hertz is a darling on the street. it is very widely owned, people love it. it was supposed to be one of those stocks you were supposed to beat and raise estimates
every quarter. some people are mentioning the competition but a lot of people a are scratching their heads. i want to get on the conference call and get more information. european banks are down. barclays discovered they really only make their money in a few countries. they're going to get out of most of these countries and stay in the ones they can make the most money. guys, back to you. >> thank you very much, bob pisani. may i see he looks very sharp today. very sharp. >> some news on air product, upon news. you may recall some time back when the company put a poison pill in, i told you at that time that purchasing square was likely to be the acquirer of a significant amount of stock but then silence, 10% holder, would
they initiate a proxy fight? would air products decide to fight? we knew there would be an awful lot of weaponry in their arsenal if you were to go against mr. a ackman, wouldn't there be, given what he's been facing lately, whether it be herbalife or jcpenney or loss of assets that have taken place. but, no, adp decides not to fight with its 10% purchasing square and settles on a deal in which mr. ackman appointed or approved two independent directors to the board and also accelerated the retirement of its long-time ceo john mcgrade.
>> i remember meeting matt paul when he was fighting ackman when ackman was an activist in mcdonald's. there's john mcglade. there's matt paul. thank you for going back to that. probably a win-win here in many ways. it is a 10% holder. given what you could bring to bare against mr. ackman, it would have been -- i wish they would have had a fight because it would be fun to follow. you can also understand why mr. ackman, who is looking to build credibility again, he most likely will not serve as on a board again. john mcglade will retire and they'll find a replacement for him next year.
nothing will stop manning from launching a proxy fight in 2015 if things go well. this is a $2.2 billion position for mr. ackman. and that will go a long way towards restoring some of his credibility, credibility that i would argue has been lost as he has fought this battle in her herbalife. he's the man responsible for bringing mr. johnson in, who suffered a mortal blow for that company. >> does air products have a lot of value within it? a lot of people think it's a sleepy, allentown, pennsylvania company, not far from where i grew up. maybe ackman wants to come in and shake up what some would say is a country club attitude. i like air gas, a company that
air products tried to buy. air gas, arg, has been running neck and neck with them. >> the approximate eye fight would have begun, i think the deadline was today. it would have been interesting to see but we never saw any proposals from them. now this company will have to perform and that should help his performance if in fact it helps right. >> let's get some breaking news. steve liesman is joining us. >> gm and the treasury could be about to part ways for good now. the treasury announcing another sale of gm stock, the treasury holding 101 million shares right now. they did one sale in may, looked like it brought it down to 240, they did another sale that brought it down to 100. so this could be it, guys, if you see the gm chart now at $37. it has continued to rise while
the treasury has gotten rid of these shares. these shares obtained as part of the bailout of the auto industry. overall the treasury is saying it's recovered 404 of the $420 billion of t.a.r.p. fund it is put out. they're holding $120 million shares. i don't know that they're going to sell the 101 shares. jim? >> tim massey said they were going to try to dibl some out. if you look at what happened with aig, you had to buy that last piece. it was remarkable. people should buy this. >> they went from a dribble out to a big offering. you had a lot of reverse inquiries to some extent and they said the demand is here, let's just blow it out now at this number. had you the sale of the uaw. that was just this week. >> well capitalized, business is real good, has a good china
business, a good european business. this is a buy. people are going to say wait ash second, there's a lot of ply splooi coming. talk to yo-- there's a lot of s coming. well, talk to your broker. let's go to rick santelli at the cme in chicago. >> if we look at the five-year, there is a bit of flattening going on. look at this 24-hour chart. we settled under 140 yesterday, we hover at 144, reversing some of the fund-driven steepness that emanated from a purchase pushing yields down. we had a pop in the yields. that's a common denominator today. yesterday toying with the highs and also the 8:30 eastern jobless claims number putting a pop in yields but it wasn't only
the u.s. the same dynamic happening in bunds, a lot more symmetry between the bund and the 10-year once again. if we consider the risk variables that have been greatly enhanced after the non-taper, in my opinion, you can see it join up in a lot of places. we haven't been at these levels on a closing basis since july 19th. the chart starts at 18th. let's square gears a bit. when we consider what's going on with the dollar, many believe we'll see 78 before we see 83 or or 84. the pound versus dollar, testing 160. you can see it's coming down a bit. if you open the chart to february 1st that, will give you a good look at the dollar index.
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all right, six stocks in 60 seconds with jim. >> how about lumber liquidators? >> i always talk about this as one of the growth stocks. piper raised its growth target, said it's a ten-year plan of growth. >> diamond foods? >> i want to find out what herb greenberg is saying. this stock was down here when they had all the problems. looks like a big comeback. >> home away. >> looks like the story is not good enough. >> ralph lauren. >> ralph lauren did not report a great quarter, did not give
great guidance and now it's coming back. >> dram. >> looks like they're tight. >> what is coming up tonight on "mad money"? >> we have duncan graham on. it's one of these situations where they're going international and moving out west. i think this is a stock that's been stalled. let's find out why. >> interesting. interesting to hear whether you like this or starbucks better. >> ooh, very tough. >> tonight do you go with 49ers or rams? >> look, i think the rams have been a big disappointment. i'm sitting bradford, playing luck this weekend. 49ers have had a couple of bad games. kaepernick comes back. >> okay. 6:00 and 11:00 eastern time, "mad money." when we come back, pending home sales coming back. and paypal's president with more on the $800 million purchase of
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his way into main justice this morning. he is sitting down with attorney general eric holder today to try to discuss a possible settlement of the outstanding security related issues that jpmorgan among other regulators have been grappling over. we heard the settlement amount could potentially be as high as $11 billion. there are a number of lawsuits dimon is trying to resolve all at once, including one with the attorney general. from what i'm told, the meeting has been on the calendar for at least a day. obviously the two chiefs here are going to try to put their heads together, carl, and see if they can come to some sort of agreement that works for both of them. >> kate, is there at some point a realization that jamie dimon may personally be part of this problem? as one banker said, there are
regulators everywhere and that's because, as he put it, because jamie can't keep his mouth shut in public. >> there was a school of thought that jaimes jamie was a little b about his early reaction, referring to it early on as a tempest in a tea pot on having to say later this is one of the worst trades i've been involved with. there is a statute of limitations that may have been unlawful. this is now five years later. the attorney general warned he was going to issue more lauwsuis with that date coming. that's why we're seeing more in the air with wall street and legal issues at the moment. >> let's go to diana olick with news on pending home sales.
>> hi. pending home sales down 1.6% month to month. this is exactly what the realtors were warning with when they said the august close sales increase was a, quote, last hurrah. so, again, down 1.6% month to month. though still up 5.8% from a year ago. they say that the sharp increase in interest rates as well as higher home prices caused a lot of people to buy in the first six months of the year. they say they reached a six and a half year sales peak in august and they say that is the finalized month of the housing surge. now sales in the northeast the only region to see anne crease in pending index up 4%, down 1.4% in the midwest, down 3.5% in the south and down 1.6% out west. the realtors are still expecting for an 11% increase in total sales for 2013 but they're saying they do not expect home sales to move at all in 2014.
back to you, simon. >> thank you very much, diana. in the meantime, we're just four days away from a potential government shutdown. speaker of the house john boehner is about to give us his analysis of what will happen in the house. let's bring in our own john harwood. what are we expecting boehner to say? >> what we're expecting, simon, is he's going to come out from a meeting with republican members and talk about what the republicans are going to ask of democrats and the obama administration in return for raising the debt limit. remember the house has already passed a bill to extend government funding. they included the defund obama care provision, said it's going to strip that out. it appears that republicans, though they may add another condition to that bill, are mostly moving their attention to the debt limit, which treasury secretary lew told us yesterday we would hit on october the 17th. so the debt limit has to be
increased by the 17th. republicans have been considering a long list demands to make in return for willingness to raise the debt limit and i expect john boehner to sketch out exactly which ones they've settled on. >> john, are we expecting john boehner here to indicate which way he's going to go come monday? is there any doubt he's going to be able to cast his vote that the house will have to move forward unless they get back from the senate over the weekend? >> sooner or later they're going to have to move forward. i expect he will get asked that question in the q & a part of the press conference after his initial statement. and i do think that the likelihood is that we will avoid a shutdown and that the republicans in the house will either acquiesce in or actually vote for an extension of government funding. they're trying to by putting a list of demands on the debt limit satisfy their numbers that the leadership is pressing conservative priorities against the administration.
the problem of course is that president obama says he's not negotiating over the debt limit. democrats say they're not negotiating either so we're going to have to see how the -- once the senate acts on a debt limit bill, which we expect by the end of this week, how the senate then digests that and in what way do they strip out the provisions that they don't like, just as they are doing on the government funding bill. >> as we awake the speaker, obviously the play book here is a little bit murky. some are discussing various ways conservatives might try to work in various provisions as part of all of this. a couple examples in the post today, the keystone pipeline approval, perhaps abolition of the consumer financial protection bureau. how likely is that? >> not at all. what this is is the legislative equivalent of a christmas tree. they're loading it up with all sorts of priorities -- or at least they were discussing that. that's what their caucus meeting was about this morning, discuss being which of those they're
going to tack on to their bill. it's not going to be the whole list of everything that's been discussed but it would be a significant number i would expect. and the more things you put on, the more possibility is that maybe you put something on that democrats decide they can accept and you go back to your members and say see what we got. one thing that's gotten a lot of discussion either as part of the debt limit or as part of the government funding bill is a repeat of the medical device tax, which is start of the obama care. it doesn't go to the core of the bill but it helps pay for the bill. a lot of people don't like, it, 79 senators, bipartisan vote, have voted to kill it. that has not happened. president obama and the white house will resist that but that's one of the things that's in the zone of discussion. >> john, just briefly to that point about the medical device tax. what happens if it goes away?
what happens with obama care. the core of the obama care and most of the funding would remain in place. >> to be clear, john, the gop wants -- or bilaterally there's perhaps an agreement that would reject a tax to lower the deficit? >> no. if they get rid of the medical device tax that, would increase the deficit because it takes away one of the items that helps pay for obama care. >> exactly. and the "journal" making the point this morning that perhaps all the focus of defending obama care is coming at the expense of controlling the ultimate amount of spending for government, which is a priority relating to the debt ceiling and to a government shutdown. >> well, what we've seen from republicans and this group of republicans in particular is less concern about the deficit per se and more concerned about the size of government. so if you -- if you took away the medical device tax, you would be taking away a government revenue stream but you wouldn't really be making government smaller, which is one
reason why this might not ultimately happen. >> exactly. john harwood, thank you very much, sir. we are awaiting comments from speaker of the house john boehner. let's bring in the vice president and director of research with aerial investments and the chief economist and founding partner of rdq economics. guys are good morning. >> good morning. >> a warning, we may have to jump in and hear the speaker as soon as he begins. charlie, first to you, the focus for market seems to be we've been through this before so we're not that worried about a shutdown. but the narrative out of washington the last couple of days is is it's going to be worse in 2013 than in 2011. is there too many complacency here? >> no. we think the market is getting it about right. there's going to be a lot of noise, there might be a shutdown like in the newt gingrich days but we don't think it's going to last for a long time and we don't think the u.s. government will default on any obligations. there's going to be a lot of noise but we do think it's going
to get worked out. >>. >> i would agree with that except the process has become adverse -- the debt ceiling, those negotiations trouble me and that's going to be a point of focus for the next three weeks as we approach that date. >> charles, i guess i raise the issue, it's not this particular piece of legislation, there seems to be no room for bargaining, no backup plans on either side as ezra klein was describing it. why shouldn't there be more concern about a small default or
small shutdown of the government? >> because this is a huge operation with trillions of dollars throw floing through it every year. they can find money from one pocket or another in order to pay interest on the debt. there is close to a zero percent chance they're going to default on any bonds. they can delay payments to lockheed on a defense contract. there are all kinds of things they can do to stretch money. >> john, how worried are you that the economy is slowing? the reason that the federal reserve is not tapering its qe is because it's clearly worried about employment growth slowing. are you concerned the economy is slowing? >> no, i'm not. in fact, i think the fed promoted the idea of the economy slowing by its failure to announce a small tape they are week. if you look at the numbers at 8:30 this morning, especially the small claims jobs data,
they've fallen, through all the distortions called by california and their back log of claims which have been cleared up. 308,000 is at a level consistent with a much stronger jobs picture than painted by the payroll data. >> there is a disconnect between the job roll figures and an employment report each month which is not so good. >> there is a disconnect. we're waiting as we chat here for, i haven't seen it yet, the benchmark provisions to payrolls for march of 2013 payroll levels. in the past, last year, we saw an upward by almost 400,000 when the benchmark revisions came. so it seems to me we're get too long fixated on initial data that subsequently get revised. >> charlie, this morning we have a reminder in the second quarter the increase in inflation was one of the smallest that we've
seen on record and again raises the specter of deflation, just broadly whether the u.s. economy has enough momentum to make sure if there's a small hiccup, say one coming from washington that, we're not throw back into recession. >> that's right. we do think what's going on is bernanke is a student of history. he remembers 1936 when the fed and washington got too tight too early and brought around a second recession in 1937. he's not going to allow that to happen on his watch. he sees no signs of inflation so he thinks he can still have a loose money policy without a lot of risk. we think that's what's going on. but we think the taper starts at the next meeting. and so this is not going to be waiting until next year. >> in october, charlie? >> that's what we think. we were wrong. we thought it was going to start last month but we think it's going to start this month. >> i'm sure you've seen what mark zandi told the senate budget committee and that's even
a three to four-day shutdown could shave 20 basis points off the gdp, is that reasonable? >> i'm not buying those kind of estimates, just like i didn't buy into the estimates that the sequester earlier in the year was going to do significant damage to the economy. to me it doesn't make sense that we could get that kind of impact from a short shutdown in the government. and if it does shut down, i think it will only be a couple of days. it's not a winning political strategy to close the government down. i think we discovered that back in newt gingrich's days and maybe republicans need to relearn that lesson. >> we think they have learned that lesson. that's why we agree it's only going to be a couple of days if it happens. >> charlie, john, thanks so much for tap dancing with us as we look at that incredible live shot. looks like people waiting in the doctor as office but clearly the speaker is going to be a few
more minutes. in fact, there he is. this is the speaker of the house. good morning, everyone. listen, the american people don't want the president's health care bill and they don't watt the government to shut down. we passed a bill last week that would do just what the american puig ask people asked. we're going to introduce a plan that ties important spending cuts and pro-growth reforms to a debt limit increase. now, the president says i'm not going to negotiate. well, i'm sorry but it just doesn't work that way. we're not going to ignore washington's spending problem and we're not going to accept this new normal of a weak economy,
shrinking wages. we need to strengthen our economy and deal with washington's spending problem. >> good morning. the speaker said last week we sent the senate a continuing resolution -- >> short and sweet. speaker boehner on the shutdown. we go to john if there is any material to analyze. john? >> not yet until we see what's in the bill. sort of what the speaker was saying to the president, he won't negotiate, it just doesn't work that way. that's where we get the real collision course. the administration is saying, no, no, you don't get it. we're serious. we're not going to negotiate over the debt limit. now obviously the issues related to the budget and the continuing resolution and avoiding a shutdown, those are subject to negotiation,but b
negotiation,but by loading things on to the debt limit bill, if we get an extension over the next couple of days, that puts an all-or-nothing quality to the gam bit that the speaker is emphasizing. the secretary has said privately, administration aides say we're not kidding, we're not going to net and somebody's going to have to give. >> and at the end of the day, do you think they will stick to that, john, or can their bluff be called? >> well, somebody's bluff will be called and we'll find out which one. i suspect because the republican negotiating hand is much weaker than it was in 2011, remember in 2011 they were coming off a huge mid-term election victory. now they're coming off the reelection of the president. yes, they held the house but democrats held the senate and the republican party took on a lot of water as a result of the 2011 crisis. so republicans have a weaker hand to bring to this but they
haven't folded yet. we'll see if they do. >> all right. thank you very much, john harwood, as we continue to see eric kanter continue to speak in washington there. >> the dow sup tris up triple d. also a big time for technology sectors. dominic has a look at technology in q4. >> the fourth quarter is a big deal for a lot of sectors, a big deal for technology as well. it really has underperformed the broader market to the tune of around 6%. so what are the big themes that tech investors should focus on as 2013 draws to a close? we asked the head of tech sector research, scott kessler, what he's keying on. first he says the fundamental story for tech revolves around spend big companies. he said many business unit heads may be looking to spend whatever
budget they have left before the year runs out or risk losing that budget. so adding that technology spending that, refreshing cycle, could be a lot of catalyst for a lot of these tech companies, particularly for enterprise hardware and software. he likes ibm. and also e-commerce firm? china, alibaba possibly looking for an ipo, possibly here in new york. and tech titans could be putting moore of their mounds of moulah to work. he says we could see even more merger activity as well and we'll throw in a fourth just to watch this stop in particular, apple. kessler thinks things are shaping up well for the phone maker. it's the holiday season. keep an eye on how busy your
istore looks. lots of big things happening as we take a look at what's happening in the technology center. >> dominic chu looking forward to the fourth quarter. >> today paypal is buying braintree for $800 million. the president of paypal will join us to tell us why he believes it's a good deal for everyone. "squawk on the street" will be right back. americans take care of business.
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>> ebay's paypal announcing it will buy braintree this morning. david marcus, paypal's president, joins us. good morning. >> good morning. >> some big clients, living social and uber. how important is this? >> well, you know, being the payments operating system and enabling all of the disruptors and innovators of the world to build great consumer experiences that intergreat payments in a really easy way is really key for paypal. and braintree has clearly led the way in tools for developers to build great apps on top of their platform and especially on
mobile. so it's a great deal and we're very excited to welcome the braintree team within the paypal family. >> people will look at this and may at first glance and say this looks really defensive. in particular embedded in this business that you're buying venmo. what will it do for payment systems in the future? what is the vision and can you keep buying up the latest disruptor along the way? >> well, first of all, it's not defensive. it's really a play where, you know, you see startups that are innovating and building great tools because they're focused on one thing and they're doing it really, really well and they build a culture around that thing. in the case of braintree, they built an awesome platform targeted to developers and they had a company culture service and to a white glove service to
those companies, that's amazing. that's what we wanted to bring in, that culture and that focus on the developer community. and then on the venmo piece, it's early days. some people really don't want to mix money with social. we've seen that there's a -- they want it to be separated. but for a younger demographic, they don't care and they're happy to share who they're paying and for what. so we look forward to experimenting more with ven their mo and finding out what's the sweet spot globally. >> do you then look at strike and at balance, which are the upstarts coming into the braintree space as potential other targets of acquisition or as targets you're hoping to display by investing more in braintree? >> clearly we've picked the company who we felt was the
winner in the space. and the reason we think that is braintree has leadership in mobile, they invested very early in mobile, that's why a bunch of other companies are running on their rails. they've built an international presence, much faster than all of the other competitors. we feel very good about leading the market and competing fiercely for that developer segment now with braintree. >> david, there's been some discussion that perhaps you and square were both in talks for braintree. are we in a land grab here for mobile payment companies and how much more are you willing to go out and buy? >> well, i think we don't need to go out and buy a bunch of companies. the real important thing is to have the payment os, if you will, having the tools that enable all of these innovators out there to build those great experiences. we definitely want that to be
paypal globally for every and any company that needs to integrate payments in their experience. so we feel good that with the existing paypal product portfolio and capabilities, combined with what braintree can do very specifically for the developer market segment, that we're in really good shape now. >> finally, just on a broad macro question here, david, we had some reports yesterday about various large retailers cutting inventory for the quarter. what took more steam out of the dow yesterday afternoon was not walmart but visa. i wonder if you think consumer transactions are going to soft i don't know up as much as some believe. >> well, it's really hard to predict. i don't know whether consumer transactions overall at a macro level will soften. the mix of where consumers are spending money is really, really changing. they spend more money online, they buy more mobile. and a bunch of others are
falling off. so where they are spending the money is definitely changing and, you know, we'll know very soon whether a total spend is actually slowing down or not but we're not seeing that for now. >> interesting stuff. david marcus joining us on a day when paypal has just acquired braintree. thanks very much. >> thank you. >> shares of jcpenney coming off of a 13-year low after the retailer maintains its turn around is working. the question now is whether there is any hope left for the struggling company. the stock is off 1%. [ female announcer ] it's time for the annual shareholders meeting. ♪
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welcome back to "squawk on the street." i'm jackie deangelis, where we're waiting for the weekly natural gas inventory number. that number is now out. we saw a build of 87 billion cubic feet, 87 billion cubic feet. this was higher than expectations between 74 and 78. this is a bearish number. we're watch beiing the price no little lower. traders tell me they expect support to be around the 340 level. the price will depend on temperatures and they are mild at the moment. there's really no demand for heating or cooling. we are seeing this built in the number. we were seeing the price down in the morning. traders were telling me it's october expiration today and that's what's happening impact, not a lot of demand for this product. guys, back to you. >> thank you very much, jackie.
welcome back. for the first time since 2009, the rising stock market is actually making believers out of average investors. this according to the latest cnbc all-america survey. steve liesman joins us now with more of the details. hey, steve. >> reporter: this is an interesting development here. i want to walk you through the history of this poll we've done, 800 americans across the country. we've been at this for about six years now. i know it's a lot of squiggly lines. i'm going to try to explain to you how to focus. the green line here, that's the dow jones industrials. it's been going um for about five years. now i want you to focus on this darker blue line here. what's been happening to investors sentiment. in this poll we ask people is this a good time to invest or a bad time to invest. so as the market has gone up, people'ssentiment to invest has
come down. translation, average investors have missed this uptick in the stock, until right now. call it in the march time period for the first time in five years what we've seen is the dow has gone up and so has investors sentiment come along with it. we have two groups, the first group is all investors, anybody with any money in the market. and the light blue line are those with more than 50,000 in the market. they're more optimistic than they have been in five years. that 56% who say now is a good time continue to vest is the most optimistic they've been. is that the right thing to do? i'm not saying whether or not it's wrong. do what does it mean for stocks? it's the first time we've seen a link between a rising market and investor sentiment in this survey so people are starting to believe. we did another ed koch question.
how's your portfolio doing? compare it to last year. 46% said it's better. it's one of the better responses we got. zoom in. by income, those with more than $100,000 income doing better, democrats doing a bit better than republicans but independent and tea party folks doing a little less. this is very important. how your home prices are doing affects how a lot of the rest of the economy is doing. so, carl, i don't know if it's good or bad but finally some believers in this rally and what did it take? it took repeated headlines of saying that the dow jones is at an all-time high. so a tough road to ho but it finally looked like it had some effect. >> fascinating. i assume if viewers want actual figures, numbers on those bars,
they can go to the web site? >> absolutely. cnbc.com. we'll have the whole poll up in about 30 minutes or so. can you read through it and come to your own conclusion about what it means. >> a perfect contrarian i thought. >> it could be. who knows. >> a lot of subtext there as well. steve liesman back at hq. >> still ahead, some of the fashion designers are making a line just for runway. "squawk on the street" is back in a moment. letely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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ceo of that company, mike ullman, is apparently more confident about the state of the company's finances that the street has definitely been and is telling investors as much. in fact, he's telling investors, at least some of them, that the company will not need to raise capital any time soon. we saw the stock sell off hard yesterday, down about 13%. today in the premarket it did briefly dip below $9. some quick background here. there have been plenty of rumors on the street over the past 24 hours, even a report by reuters last evening that jcpenney may be raising additional capital, perhaps as much as $1 billion. david faber reporting yesterday that mike ullman was here in new york yesterday, met with a group of investors to talk about the business and didn't leave some in the room very impressed, wasn't as positive as they wanted him to be and a turn around could take some time.
i can add some additional color to that in that i'm told by somebody who was in that room that mike ullman spoke for about 15 minutes at the top of the meeting, he took questions for about 45 minutes to an hour. i'm also told by someone again who was in that room that mike ullman said the following: we don't see conditions for the rest of the year where we need to raise liquidity. we'll see how we do in q4. i'm also told that jc penny's cfo was not there. uhlman did not choose to update current guidance. but, david, i guess you could say that this sends somewhat of a signal to vendors, investors and others that maybe the situation isn't as precarious as others might think it >> yeah, thanks for that, scott. as you well know, confidence continues to be key for a company like this. it's not a financial institution where it can go very quickly
south but nonetheless given vendors and suppliers, that can be important. to your point, scott we shall have a quote as well from the spokesperson from jcpenney on that very subject of confidence because of course you got to believe they're being asked about it quite a bit. they say "quote, jcpenney vendors are very supportive, we are paying them on time and we have nod heart any issue with regard to factors." they are suffering from the reign of ron johnson and mike ullman trying to turn things around. only on the 19th of september, a very large shareholder sold at 13, left the board, they were an insider. i'm sure some people looking a at that sale going really? simon.
>> let bring in the editor of "women's daily." dana, this is a difficult situation for shareholders watching because if they have to raise capital because they already have so much debt, it's going to be highly dilutive of the shares that are already in circulation and therefore the share price could fall quite dramatically given whatever the discount is. what would you say to investors now, stock investors? >> so a couple things. we had our conference yesterday and we had over 60 companies there over the past two days. many of whom are vendors who supply jcpenney. i would say that no one wants the company to fail because these vendors need diversification of supply channels to sell into. but business is not great anywhere. everywhere we're hearing just about the retail landscape lately, traffic is a challenge, consumers are spending on durables versus discretionary. i think this is going to be a long-term turn around in order
to get the business back in shape and they have to fight harder in a very promotional environment. >> now, that's really interesting you should frame it in that way because the statement that david faber just read us from jcpenney was all about factors. and this is effectively those that borrow to fund their orders from jcpenney from the likes of first capital or clt, it's the extra that they have to pay and the cost of doing that for suppliers for jcpenney is far higher than for target or for walmart. i have a contact of mine who is a supplier for jcpenney and it's been a tough year for them. he's been telling me that jcp has been putting buyer holds and asking for gross margin company saying we've not sold it for how much money you thought it would sell for, you need to make up some of this. every time i meet this guy he asks me the same questions.
he's will jcpenney go into chapter 111? the next time he asks me this, what should i tell him? >> the chances minimal. it's the chance of ullman. the retail landscape is challenged all around but the good news is penney's comps are so weak that any good news is going to be seen as a victory and there are signs of improvement in men, in denim, in certain areas where ullman has been able to make a quicker change. but he really wasn't able to touch any merchandise, any promotional program or anything until holliday and most impact would be for spring 2014. so i think as long as penney's continue to turn around, the liquidity doesn't become an
issue, i don't think chapter 11 is an issue. >> dana, you didn't meet with ullman yesterday, did you? >> no, i didn't. i had our conference, we had over 60 companies there on tuesday and wednesday. >> i just wanted to make sure. i knew he was around. i had heard vaguely that was the case. >> when i talk to people who know retail extraordinarily well, they speak to what you think i referred to, which is a multi-year turn around. how do you explain that to an investor when it can get 18 months just to get them out of the hole dug by ron johnson, if they're able to do that. and what's the dynamic for an investor to consider if they want to think about even getting into this name? >> this isn't for the faint of heart. you have basically to take a look at what's your time frame? how long do you want to wait? because even though they're going up against easy comparisons, their gross margin has been compressed and very much pressured. they used to have a gross margin
in excess of 35% and now you're sitting here under 30%. in essence, it's going to take a year, year and a half and are they willing to wait and see step by step what's going to change. there are other businesses that have a sure growth track, store openings, online initiatives that this company you may be able to get some same-store sales rebound but how's the profits going to be rebounding with that? you got to wait at least a year in order to see what it looks like going forward. >> guys, we'll leave it there. thank you both for your time. >> thank you. >> now, straight ahead, jamie dimon, housing and rick santelli, we'll blend all of that together and let you know what we mean when we come back. ask me what it's like
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infuse an fha. the reasons aren't necessarily complicated. there was a period from '50 to '08, where a lot of at least lines have gone sour him one could argue their standards have been tweaked a bit. in the end, they are going to need money. it brings me to the crux of the matter. whether it's the fha, whether it's the government sponsored enterprises, whether they make money, need money or lose money, it's very difficult to make significant changes to a car's engine and transmission or differential when it can't be taken out of service. it's on the road, driving it, 50, 60, 70 miles an hour. but all these short-term issues we haven't learned from history. we need to figure out a way whether profitable or unprofitable to make the mortgage arenato stand more on its own. taxpayers shouldn't get involved and fha doesn't need to go to congress.
one more thing, real quickly, simon hobbs mentioned and it coordinated with many traders on the floor, that jamie diamond and some of the regulatory issues of j.p. morgan chase, maybe there is an aspect to this. he was pretty flippant, tempest in a teapot. the conversations i have, it's up to you. you you know, do we want a government that may or may not give you a hard time because you march to a different drummer? i think this is an important issue. especially when $125 billion was force fed on them. something to think about. there will be more ""squawk" on the street" in a couple of minutes. .
to cars like ferraris, aston martins and audis. hertz shares down sharply today in spite of that fact. some people talking about it saying, simon, look, they're trying to get out there with news on yay tez la. >> they have problems with the weaker starts at the airports. the one they doubled down with the 1.50 acquisition, do you remember? stocks down about 11%. they were the ceo was giving a presentation at a conference today. it was contained in the slides. so he was kind of bound to have to come out. there was a statement from hertz as well. i'm not sure you can see the stock. it is up, avis is down. alaska the ceo of hertz, if he'd be willing to come on. not today. he's busy at a conference. >> they say they have to make up
some on pricing to offset the declining volume, as simon says, the airport is the bulk of the business. >> that is where the money tends to be made. it takes the range down, they see 1.78 t. range was 1.78 to 1.88 priorment meantime, you have been mentioning. we lost a lot of ground here. twerp up on the dow now up 42 as i think people start to get a handle on just what a mess congress is going into next week. >> it does feel and it's hard to attribute ever, especially right now, as to what is moving the market here. we were up triple digits. interesting enough, just during john baker's comments this morning, he seemed to indicate there would be a deal reached on the government shutdown, still so many caveats. the dow now has given uhl up the bublg of those games. >> under lying is the question of whether growth is slowing. it is rare actually the headline comes out, growth in this country is slowing down for the
markets are going down. it is usually in the four years i have been here, it has ascribed to something else. a downgrade on the dirt, be it the fact that we have political trouble. it happens time and time again. that is a real debate. is growth slowing to the fed's inaction? >> all right. we will see you later on. if you are joining us, a lot of news, here's what you missed. . >> there is no middle in the congress. there really isn't. if you just look at t voting pat tens. >> that is the core problem. >> that is not going away. we keep having these episodes. we will get through whatever we will get through. it will be back again next year. >> what is the toyota view of when i will be able to sit in the back without jeebs in the front? >> not in your lifetime. >> you just ruined it for everybody. >> what macy's is doing poorly, maybe it's the part of wal-mart
not doing that well. why would i think j.c. penney is doing that well? >> it is the most short name. >> facebook does look to be trading above 50 in the premarket, jim. it is a long way from 17. >> there is going to be a lot of noise. there may even be a shutdown for a couple of days like we had in the newt gingrich days. we don't think it will last a long time. >> the president says, i'm not going to negotiate. well, i'm association but it just doesn't work that way. >> they have led the way for a tool for developers to build great apps on top of their platform, especially on mobile. it's a great deal. we are very excited to welcome the braintree team within the family. of pay pal.
>> happening right now, attorney general eric holder is holding a news conference in washington and with a big announcement. scott kohn has the latest. >> attorney general eric holder is about to announce a $740 million plea agreement with several auto parts manufacturers. the names that we know thus far, hitachi and mitsubishi. this is reportedly a part of a long-term investigation in the auto parts industry and there have been a number of cases here and there over time in terms of collusion, price fixing and so on in the auto parts industry. he will be appearing with scott hammond the long-term leader of the anti-trust division, who is actually leaving next week. this is maybe a sort of a kroung achievement for him. in a news conference with eric holder, with so much going on in white collar crime, krnl issues, j.p. morgan, all of that talk, he is likely to get other questions as well. we are monitoring that closely.
the headline and the think bringing the attorney general out this morning is this reported $740 million plea agreement involving a criminal case in the anti-trust division involving auto parts. we are monitoring it. we will keep you posted. back to you. >> scott, thanks very much. at the same time, attorney general eric holder meeting with ceo jamie diamond in washington this morning. kate kelly with details on that meeting and what it means for investors. >> hey, kate. thanks so much. i think this is a positive sign for investor, j.p. diamond and eric holder the attorney general are trying to come to some sort of resolution of this long-running investigation into mortgage-backed securities launched by not only multiple jurisdictions within the doj, also, new york attorney general eric sneiderman among others. they are seeking to tie these multiple investigations into one large settlement. as of yesterday we heard the fine and examiner relief attached could add up to about
$11 billion. no further details yet on whether that is the operative number. i am told talks are fluid. we do know that diamond and holder spoke and maybe are wrapping up right now ahead of this holder press conference about a way, kelly to resolve this to everybody's satisfaction. >> kate, is it your suspicion that if this were to close in a manner that diamond would like that it would then close the doctor to the farc or some of these other agency with whom they're still holding talks? >> unfortunately, i don't think so, carl. there were news reports earlier this week suggesting that perhaps there would be a so-called global settlement of issues, as you mentioned, there is a continued fallout in the power markets that the company par took in. >> that is now on a criminal investigation phase, of course, there are issues about hiring in terms of hiring folks who are related to chinese officials allegedly in an effort to create favor with the government to get business and so on. there are too many issues to
expect a settlement in the coming days. i think this mortgage question has been a huge albatross and investors are looking for collarty on that. i think we will see loose ends coming up, which is still a question. >> great reporting. thank you, kate. a lot of questions there. meantime, in walk, we're days away from a potential deposit shutdown, three weeks from the possibility of a government default house speaker john boehner says he thinks lawmakers will avert a shutdown, he is seeking a whole host of concessions in return for raising the debt limit. john harwood calls it a christmas tree strategy. he joins us in washington with more. hi, john. >> hi, carl. you got multiple things going on at the same time legislatively. the senate is moving forward on the bill. the house is extending government funding, defund obamacare. >> that i will take out that provision t. house which has to decide whether they will accept that government funding bill without the obamacare division
has come up with a new bill for raising the debt limit, which we hit in three weeks according to treasury. they're loading a bunch of demands, including a delay in obamacare and other conservative priorities, including the keystone pipeline t. speaker says the president is going to have to wake up and realize he needs to engij in some give and take with republicans in the house and in the senate. here's the speaker. >> the president says, i'm not going to negotiate. well, i'm association but it just doesn't work that way. we're not going to ignore washington spending problem and we're not going to accept this new normal of a weak economy, no new jobs and shrinking wages. >> now, that defines, really the stalemate that we're in, because the administration from the president to the treasury secretary to white house aids privately say they're simply not going to negotiate on the debt limit. how both of these things overlaping problems get resolved at the same time is still
unclear, carl. >> all right, john, thank you very much for that. we'll keep an eye on aster out of washington that is having an effect on the markets today t. dow now is hanging on to a 19-point game as opposed to 119 points not too long ago. meantime, facebook sets highs today, it trades above $50 a share. has it gone up too far, too fast? the managing director, a senior portfolio manager at turner titan, a fund and a facebook shareholder. guys, good to see both of you. >> nice to be here. >> good to see you. >> it's easy to say that, the fundamental am momentum facebook has and its le advertising business, selling downloads to developers, downloads of mobile apps, selling to the consumer goods company and response-based ads through the facebook exchange. all of those businesses are really hitting their stride right now. so i think the chances for earnings upside are very, very high. i think the stock will probably
continue to work. >> chris, since the july quarter, facebook has added 56 billion in market cap. >> that is great ever than 436 of the other s&p members. how have you put it? how is the position? i assume it's gotten much larger. how does that fit into your portfolio? >> well, it still fits in very nicely. we're not looking at a day-to-day basis or a week-to-week basis. our belief and we have been a big owner of facebook over the last 18 months, is our belief that over time is going to be materially bigger company. they're looking at a xen that should be doing close to 10 if not higher than $10 billion in revenue next year. it's very hot with advertisers, unbiologicaled reach. there is no other place in media where you can find a company with 15 to 20% market share of the space that they rule, basically. so this company is a winner.
i want to get tied down in the fact all this market cap. there hasn't been a loan, companies likeville low or netflix are up 200% to date. if you compare face b.c. to those companies, i would say it has more room to run. the momentum is there and the revenue growth is accelerating. >> jordan, at the same time, this ultimately comes down to a battle for eyeballs. if twitter is following close on the heels of facebook, it is going public. is that a risk to some extent for the ability of facebook to keep attracting audience and monetize athds here? >> i don't really see it that way. i think it's further validation of the business model that these social media companies have been able to develop. hundreds of thousands, if not millions, of advertisers literally, facebook has over a million advertisers, are reaching out to these platforms to reach people difficult to find elsewhere. so twitter to some degree, facebook, a whole bunch of
others are blazing a trail here, showing other companies how to act says the marketing budgets for small, medium size local businesses and the biggest brands alike. i think it really is a change in the entire media landscape. >> chris, it's easy to forget, but there are still those things that the bears crowed about when the stock was at 18, namely, teams leaving the site, right, deleteing their accounts, a lot of dormant users. the potential for cheryl sandberg to leave t. notion that mark zuckerberg might sell stock in large quantities. have those concerns disappeared? >> i think they broadly have. the key thing you have to look at is total usage. total usage is still growing very quickly. just when you get the com score data for a second, which brings all the users down to one number. usage in mobile was up 120%. total company usage was up over
44% in a most recent period. so, yeah, you might have some people 18 turning off, but the usage numbers, which includes people turning on and turning off is still growing incredibly fast. their share in the mobile area is so much higher than anybody else, if you are an advertiser, you have to look at facebook. you have to. you have for the other choice than to look at facebook as being a great medium for your business. >> to add to those points, we have several stock catalysts ahead of us. the introduction and further expansion of video advertising. >> sure. >> starting to monetize, instagram, which isn't in the audience numbers which were just cited. >> s & p. >> i believe it would be in the top 25 or 30 if it were added today. >> it's the largest country dmupt not to be in the s&p. >> if you think about it. i don't know how s&p does their
things, but there is an assignened and approved agreement for dem that. spot might free up sooner or laterment within it does, i would imagine facebook is among the likely companies to join that list. >> interesting. the shift in sentiment is unlike anything he's seen in his career as it's come a long, long way. jordan, chris, thanks, so much for your time. >> thank you. >> thank you. >> yahoo shares are hitting their highest level in six years. david faber crunching numbers on how much that's cost activist investors. dan lowe could have made just how much when he hadn't cashed out of the stock. we'll tell you. rick santelli keeping an eye on market as well, what do you make of it, rick? >> you know, i think the markets are having a hard time with a variety of issues, which makes our guest the perfect man for the day, we will ask uncomfortable questions about jamie diamond and j.p. morgan chase. we will talk about the fed and his notion they should be more
ask me about my tempur-pedic. ask me how fast i fall asleep. ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand. tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bestselling tempur-breeze beds. visit tempurpedic.com to learn more, and find a retailer near you. >>. >> welcome back. basic materials, right now, it is one of the best performing sectors of the morning. mary thompson back at hq a
little more on that, mary. >> the five-day losing streerks basic materials. among the winners today. take a look at air products and chemicals. right now it is higher up over 3% trading close to an all time high of $110. if ceo is retiring. the firm is adding three new directors. we should note this is happening after bill ackman took a stake in the company. following along for the ride, williams is up over 1%. back to you, carl. >> mary, thank you very much for that. scott coen has great news for us. >> we told you about the news conference attorney general eric holder is holding. it is now under way. the marquee announcement here $740 million in pines and penalties involving nine
japanese auto maker manufacturers that fixed prices sold to xm, ford, chrysler the u.s. subsidiaries of honda and fis san. the biggest fine $925 million is to hitachi and mitsubishi paying a $190 criminal fine. in all $740 million as a part of a wide ranging investigation that has seen some 20 firms charged thus far. we also expect as eric holder speaks that he may address some of the other areas, the other big items on his plate, including the story is that we have been following all day, these reported potential settlement talks with j.p. morgan chase, so we will be monitoring that t. question and answer session t. headline, three-quarters of a billion dollars in fines and penalties, nine japanese auto parts manufacturers pleading guilty. back to you. >> very interesting, scott. as far as we know, though, limited to japanese suppliers, yes? >> that is the case in this
instance. it has been a theme for the anti-trust division for some time now. we've seen little dribbles of indictment, guilty please and so on. i don't know if this wraps it up or moves it to another level. it involves the japanese auto parts manufacturers that outright colluded on setting the prices that go no our costs. >> scott, thank you very much for that. yahoo shares hitting their highest level. we bring back david faber who has been crunching some numbers we all want to hear. >> it's interesting. so many investors have in the past sold and made a grade deal of money on a position. nonetheless, if it continues to go up. you sort of hit yourself and say why did i sell within i did? in this case, shares of yahoo have been moving up lately. i have been pointing out the rising value of the perhaps the ali baba stake that it holds most likely in the first quarter of next year and the possibility
that half of that stake, 12% could be distributed in some way to shareholders over time once it's an open company. that being said, it is interesting to look back and take a look. remember, it wasn't that long ago that mr. loeb sold 40 million shares in july, exiting an incredible profitable position. no doubt about it. they sold at 2911. at the time that was a high in the stock. many saying wow muzzle a bit. his guys step off the bird. he gets taken out at the high by the company, 40 million shares. but you look back now, how much do you leave on the table? about $192 million if he had not sold his stake in july. hey, listen, that's a little performance there that was left on the table. by the way, third point did hold on to 26 million shares. as a result it gained another $64 million on its
extraordinarily profitable yahoo investment. 2011 did not prove to be a very long top for this stock which continues to trade higher this morning, perhaps loe saying, ah, oh, well. although, i'm sure he's happy how it went. >> i got to wonder whether big names, billing long, did they look at yahoo and all conclude that was the top or now did those discussions reopen and they think there is another leg up? >> that leg has already seemingly begun. every time we have price talks about the ultimate valuation of ali baba, you can quickly look at that 24% stake and make an assumption based on taxing it. again, that will be a key here, once they take some of it public. >> so many implications. david faber, thank you very much. pending home sales, down for the third month in a row. so the question now is whether the beingup in mortgage rates is slowing to a momentum in the housing market. we'll take a look when we come back.
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. >> welcome back. home sales have taken a toll on buyer demand. the manager director and chief strategy officer jones us. good morning. >> good morning. great to be with you on the program. >> thank you so much for joining us. look. this is such an important issue. a lot of people are worried the increase we saw in mortgage rates has effectively put the housing market back flat on its back. what is your view? what can you tell us from your level of granularity here? >> in our view, this is a natural reaction to consumers to interest rates off extreme lows. in prior periods of rising interest rates, we've seen similar patterns where there is a pullback on sales as consumers recalibrate to what the reality of a more normalized interest rate environment has to be.
i actually think the pause in a market is going to sustain the recovery cycle in the long term, because some of the metros we were tracking were showing price jumps over the past year. this has kind of slowed that down. >> that's an interesting point. when we certainly went back and forth with robert schiller about. which still look under value? >> well, that has to do with the question of both affordability, of course, renting vs. buying. the fact that a lot of the metros around the country are seeing big price jumps because the foreclosure rate has gone from 30% of all sales about two years ago down to about 14% of sales. so there is a lot of factors affecting that, you know, surface level price movement, but markets like sacramento, atlanta, phoenix, las vegas, for example, over the past year hosted some very large increases
in the median home price of 25 to 35%. and that's not sustainable and not good in terms of the balance of the marketplace. >> you know, we went through, we seen some physicals lately, case sch schiller, the increases decline, the housing pers argue the big large scale private investors are beginning to pull back or migrate to rent also. do you think that is a reasonable notion, a reasonable theory? >> our analysis shows that there is underlying pent-up demand for the broader economy, broader housing on the for sale side and the rental side to sustain the cycle. i think we're in really good shape, when you look at the pent-up numbers, for example, we have on the natural household formation rates, 3 million on satisfied unit demands, because of the big pullback in construction over the past five years. so when you look at that, you look at the fact that the new
supply numbers are not coming in at a very robust level, i think investors that are looking at housing in general, both the rental and for sale homes that could be rented out are heading into a pretty favorable cycle. the issue is supply. if we have too many of the single family homes that were acquired for rental, down the road, coming out for sale again, in large ways, that's going to affect pricing. >> yeah. >> but if the long-term strategy is rent also, i think we're in fairly good shape. >> just a food question, to what extent is the first kind of job owning from fed chairman ben bernanke in may, up to interest rates that translated into head winds, do you consider that a big policy error, to the extent we won't know the fallout until next year? >> it seems to me the 2.3 million jobs a year we are creating are pretty examined
numbers. not enough to create inflation arab pressure. unemployment is well above the fed's target rate. so i think the psychological preparation going on in the marketplace was appropriate. but it's a very telling sign that the fed didded to delay the tapering, given the fact that we have the debt ceiling issue coming up. the fact that there just isn't enough inflationary pressure in the marketplace to worry just yet. >> no, from that point of view, it makes sense, again, i think a lot of people are struggling with how this has played out and what data may lie ahead. thank you very much this morning. >> thanks for having me on the program. a few minutes left in europe's trading day. if you think congress is amess here in the states. wait until you hear what is going on with italy's parliament. we are back in a minute. .
. >> welcome back. simon hobbs is here. simon. >> look at that map, you will see italy is down 1.3%. we are off in loans in europe. we have a problem in italy. yesterday the italian prime minister was here on the floor of the new york stock exchange trying to convince investors italy is stable. absolutely no problem. today the berlusconi issue is front and center again after mps from his party said, look, if you disbar him from the senate
one week from tomorrow for his conviction, we will walk out of the coalition government. now, it's very difficult to know how acute the problem is. the transform minister told local radio it would be up to individual deputies. it is an issue. it is affecting the markets. you will see here on the yields in italy, the yields are beginning to turn upwards. you got disproportionate stel selling on the italian bond. the italian banks are down, as can you see, other italian blue chips are in negative territory. al itala excottica in negative territory. >> simon. the attorney general is being asked about j.p. morgan in washington. >> for anybody in that mortgage case that we are discussing. >> do you presume, you have a lot there, i will say that i did
meet with representatives from j.p. morgan chase. this is an ongoing matter. i don't want to get into the nature of the discussions that we had. but i will say that as we indicated yesterday in the case that we announced in the criminal division to libor, this is something that is a priority for this justice department hold accountable people that would manipulate our financial markets for their own customer's benefit or for the benefit of the companies. we have, i think, brought a substantial number of those kind of cases over the past few years. we have matters that are under investigation and i expect we will be making further announcements in the coming weeks and months. but i wouldn't go any further than what i've said about our interaction with j.p. morgan.
>> you weren't in the room as i was talking to them. i have nothing to comment on the nature of the conversation. but before we get to other questions that are off topic here, if they have any more questions that we are have to do with this. yeah. >> thank you very much. >> we will stick around. >> so you said that it's ongoing, so that's fair to say that there are other auto part makers in japan that might be pursued and more importantly other countries like, say, south korea. >> so that is the attorney general taking a bref question or two about his discussions with jamie dimon, scolding a reporter for saying you were not in the room. if we get any more detail, we'll bring it to you. meantime, bob will bring us up to date on the dow up 34. >> you want to see how much continuing resolution smacks around the stockmarket. put up the dow jones industry. i want to show you how things have been moving depending on
what's going on in washington. we had pet session, a senior republican come out just before 10:00 eastern time saying there is not going to be any government shutdown or default don't worry about it. this is for the week. we saw the move on an interday basis. the speaker of the house came out and said worry not necessarily going to pass a clean spending bill. there will be add-ones. he didn't say what it was. there might be a one-year delay. and the market moved down. so we are moving depending upon what washington has to say. here's the markets now t. dow up 39. it was up a lot more earlier in the day. take a look at the market. it's been complacent. the vix moved up. take a look at the s&p 500. goodman sax was talking about in this morning, scene.nivenlths
look for protection around 16.50. they recommend that will be a good point to consider. watch out for complacency. we are not set up for a serious problem in washington. let me talk about the cars for a minute. listen, nobody thought hertz would come out and say airport business is weak. 27 million shares changing hands, down 12%. everybody loves hertz, everybody thought they were going to raise numbers, not lower them. finally, i want to update you on the merger with the new york stock exchange and ice, it's getting close, folks, it's looking like it's getting close. put up the full screen. we are hopeful. there is talk it might happen in okay here. the important thing going on here, put up a full screen on what's going on with the markets here, here we go, may close in october is the key point, two important things have to happen t. college of regulators in europe the five countries in euro next have to provide a non-objection. anticipate that will happen and then finally the national
regulators in europe. these are essentially the finance minters of the five countries have to provide an approval. if that happens and there is no statutory deadline. we can't say for sure this will happen in october. if that happens, then the deal is essentially done. then you will get a press release, money and cash will be exchanged and voilla, we'll have a deal. the hope here around here and over in europe is that this deal will close sometime in october. as it gets closer, we will talk about it. now it's starting to look, finally. >> like it's coming together. >> remember, it will be ice, but ice will be a separate, will be the holding company. nyse will be a separate division in ice and ice will operate. >> they can't call it nice? >> that would be great. >> nyse will still be on the door. >> yes, as we've asked from the very beginning. thanks, bob. let's get a quick check on the commodities here. jackie deang slis at the -- dea
is at the nynex. >> it's interesting because we saw a little rebound from hitting a low not seen since early july, earlier this morning. now, consider that the syrian premium is now off the table and traders are telling me we could see a little more bearishness because of that inventory number we saw yesterday. in terms of the pricing, we see w '02 i around 3 and brent around 109. meantime that, gap taking it on the chin today t. only commodity in the complex, the energy complex that is lower. >> that is because of its weekly inventory number that came out. we got mild temperatures out there right now. so not a lot of demand for this contract. i also want to talk about gold prices as well. i can't seem to catch a bid gold, despite the fact we have concerns over what's happening in washington. we could see this stronger dollar push golds down a little bit today and again, we are watching gold prices around that 13.25 level. kind of stuck there at the
moment. carl, kelly, being to you. >> jackie, thanks, very much for that. i want to turn our attention now back to washington, eric holder making more comments about j.p. morgan. kate kelly has the detail. >> so as you know, the attorney general is engaging in a press conference right now to discuss an unrelated enforcement matter. but he has taken several questions about the j.p. morgan settlement talks as well as the meeting he just held with ceo jamie dimon. he acknowledged the meeting. he refused to get in details. he said in general, a company manipulating financial markets is a strong priority for the justice department and they are working num of cases. without commenting specifically on j.p. morgan, that was his immediate rejoineder, a pretty tough tone coming from him. i am told he would not be sitting down with a ceo like this unless a settlement was -- the situation is fluid. >> that could certainly change. things could move faster.
as well, he says, he meets with ceos on a regular basis. again, not a lot of detail on the actual meeting. a lot of tough rhetoric, kelly, carl, in terms of how they see the banks right now to the extent there are stop laws. >> thank you for that. so many pots boiling. the attorney general speaking the president also speak right now, regarding the fiscal slowdown. if we get headlines out of that, of course, we will bring them to you right away. in the meantime, let's get to rick santelli for more on the markets. >> i'd like to welcome my guests today, andy brenner, thanks for showing up. it's a wild day, a wild week. let's go to three different areas. first area, italy. we are post-german elections, it seems there is a another long chapter regarding berlusconi and its effect on itly and the government. why done you tell us thousand market is moving based on some of these stories? >> we are seeing a little selling coming out of italy the ten-year i tammian bonds were
about 10 cheaper on the day. we also saw some selling in stock, basically, we are italian yields are right now, they don't make much sense anyway for american investor, so we think it's smart to take money off the table in italy. because if the deposit collapse, especially now after the german election, they could put all kind of restrictions on itly and we could have a whole big mismatch happen again. so we would recommend taking money off the table in italy at this point. >> all right. now, let's talk about a word you used in some of your writing today t. feds should be more opportunistic. this is obviously in regard to the fact we could argue if anything could ever get priced into the market with regard to the fed and what's going on in their head. you think they missed an opportunity. can you expand that? >> sure, if you look over the fed over the last three or four years, within they ended up boying the bear sterns and aig portfolios, they waited until good opportunistic times to
liquidate those. we think the same procedure should happen as far as their tapering. dpimpb that the marketplace had pretty much given the fed a pass for at least 10 billion if not 15 billion of tapering. they should have taken it last month. now they're going, they should be more opportunistic when the market is willing to give it to them. that i should taper and get out of the tapering business as soon as possible. >> all right this last topic, you know, on this trading floor, traders are a bold cynical bun were. i have to say the most common discussion of late has turned from crew dos j.p. morgan chase and jamie dimon in the discussions regarding, is he being treated fairly or made an example of? are you hearing these same conversations in your circle, andy? >> you know, absolutely. you know, there is no question over the last three years, washington has blamed wall street for everything. the wall street are the bad boy, so on, so forth. quite honestly, with regood people.
i think jamie dimon is working hard. he has a large organization. so, yes, i think he is being singled out. i hope he ends up staying with the firm. >> all right. listen, thanks, andy. i know these are uncomfortable topics to many. thanks for taking the time today, charm, back to you. >> we should know j.p. morgan shares in the grown as the broader market struggles to stay up there as well. health exchanges under obamacare are said to go live as we know well. as we approach a new era in health care, potentially, which insurance companies will be the biggest winners? we'll get you the answer when we come back.
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mid-size price. (aaron) purrrfect. (vo) meee-ow, business pro. meee-ow. go national. go like a pro. >> i did meet with representatives from j.p. morgan chase. >> that is an ongoing matter. i don't want to get into the nature of the conversations, the discussions that we had. but i will say that as we indicated yesterday in the case that we announced in the criminal division to libor. this is something that is a priority for this justice department to hold accountable people who would manipulate companies, who would manipulate our financial markets for their own examiner's benefit or the benefit of the companies. we have, i think, brought a substantial number of those kind of cases over the past few
years. we have matters that are under investigation and i expect we will be making further announcements in the coming weeks an months. >> all right. >> that was the attorney general a few moments ago talking about his meeting today with j.p. morgan's jamie dimon. we want to check in with ayman javers in washington. >> we can tell you that meeting lasted two hours and jamie dimon has left the building in washington, d.c. we got video emerging from the building here a few minutes ago. i can tell you his visit here to washington attracted quite a bit of attraction, there were still cameras, pretty much every entrance today, everybody wanting to get a glimpse of jamie citymon, it is clear they are not ready to announce particular details of a settlement based on today's meeting, but they're also signaling there is more to come
in terms of investigations into firms that may or may not have manipulated the financial markets, a strong tone from eric holder. no final announcement here of any developments regarding j.p. morgan. we can tell you jamie dimon was here for just about two hours. >> ayman javers there with the latest. those pictures of jamie dimon leaving the department of justice. stick around, see if markets can hold on to their gains this morning. the american dream is of a better future, a confident retirement. those dreams, there's just no way we're going to let them die. ♪ like they helped millions of others. by listening. planning. working one on one.
. >> it is shaping up to be a big fight over which exchange will be the one to list twitter within it finally goes public. so what are exchanges doing to win that battle? >> carl, twitter's ipo would be seen as a win for both exchanges. especially the nasdaq. given the given last year and the trading halt that shocked wall street in late august, nasdaq senior vice president and head of listings told me twitter would be a big victory for the exchange. >> certainly, twitter would be a big win for the nasdaq. twitter is a wonderful platform for ideas to flourish and for communication and we certainly think that they would be well suited to be a part of the nasdaq family of companies. they certainly were and are a disruptor. >> when asked why twitter would benefit on the nasdaq, he says
the competitor says twitter would be able to take advantage of the tech and create a relationship to open the door to future opportunities. >> it's talking about what we can do for them when the bell stops ringing, because when a company goes public, it's about the long term partnership that they create with their exchange. we really feel that our value proposition at nasdaq is as strong as it's ever been. wing will forward to our continued discussions with them. i expect that they'll make a decision sometime later this year. >> later this year, as twitter mulls over where to list, one of the factors is where they are listing this year. interestingly enough the nasc and fax are tied at 17. although, it looks like the nasdaq will end today on the exchange this morning. now in an effort to strengthen
companies, nasdaq is allowing traders to invest in companies not public. mccouldy says this platform will launch in q4. we will have-to-see if it's enough. >> their own version of the america's cup battles. now, the health care industry is about to undergo some major changes in less than a week from now. exchanges under obamacare are supposed to go live. as enrollment gets ready to go opened, which insurance companies should be the biggest withiners. good morning, bertha. >> good morning, kelly. insurers have outperformed the market. for them, exchanges are a big opportunity, upwards of 7 million expected to enroll in the first year. well point with its blue cross subsidiary is offering exchanges and could see the biggest growth. medicare molina is offering a 9. they're hoping that they could
leverage the relationship they already have with lower and middle income patients, that they already see through health programs to try i to seize this growth in the individual market. >> we have clinics, for example, many insurance companies don't. our clinics will be participating in the network. and they're located in the neighborhoods where many of these potential patients live. >> the big question on those exchanges is whether they price the plans correctly. but the big business for them could go beyond them. analysts say the medicaid expansion, which is happening in about half of the states, will allow adults to get coverage for free to make up to $215,000 a year. >> that could make for bigger crest for the medicare insurers in 2014 and 2015. after that, watch for their bigger rivals. >> if you look back at some of the entitlement programs that have come in the years before, there are always poo erdz in which smaller plans or new names enter the market and tend to gain share quickly. if you look back over time the
aggregation of share ends up and the biggest plans with the best cost structure. >> year-to-date the smallest of the pure plays is the best performer in the insurance index for morgan stanley, which has outperformed the overall market. interestingly, guys, united and aetna also have a big footprint when it comes to medicaid advantage as well. they would likely gain as well here. . >> bertha, something certainly to keep in mind as we also follow this story, of course the battle in washington. >> thank you very much, less than a week away. up next, what does gordon gecko and the japanese economy have in economy? we will tell you when we come back. stay with us. we went out and asked people a simple question:
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they said today i have come to tell you japan will once again be a country to be made. just as gordon gekko made a comeback in the financial world, so, too, can we say now ja that pan is back. the nikkei is up 45% for the year. i would argue longer-term questions have not been issued. >> it was 20 years ago before gordon gekko. >> maybe taking a victory lap early. we'll see. it's interesting to see these leaders ring the bell the opening and the closing bell. meantime, we have been talking about earning season, the first dow component to report. now alcoa is out of the dow. nike is in. they report tonight. >> so even though their fiscal calendar is different, it's not the typical july, august, september of the calendar third quarter. it still should gives more of an early gauge of what's happening,
nike could be an earlier gauge the whisper number 77%. >> and keep an eye on the vix. people talk about are we poised for volatility out of washington. the vix was up 5% earlier in the session. it has settled down. let's get down to head quarters and halftime. >> here's what we're following today, riding the volatility, stocks trying to break their five-day skid. how should you prepare for more turbulence ahead. catching air, will ackman be a winner for your portfolio? first our top story. it's emerging as potentially the biggest risk to this real t. state of the american consumer. new worries about wal-mart, jp penney and other stores raising concerns of what all of it means to the markets, especially with christmas 90 days away, it's halftime, let's play the action. stephanie, how worried are you about the c